Commissioner for Consumer Affairs v Buttigieg - [2011] SADC 48

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative and Disciplinary Division)
In the Matter of THE SECOND-HAND VEHICLE DEALERS ACT 1995
COMMISSIONER FOR CONSUMER AFFAIRS v BUTTIGIEG
[2011] SADC 48
Judgment of His Honour Judge Rice
11 April 2011
ADMINISTRATIVE LAW
PROFESSIONS AND TRADES - OTHER PROFESSIONS, TRADES OR CALLINGS - LICENSING OF PARTICULAR TRADES OR CALLINGS - DEALERS
Various acts of dishonesty proved against the respondent in his business as a second-hand vehicle dealer - proper cause for disciplinary action shown - orders that the respondent is permanently disqualified from being employed or otherwise engaged in the business of a dealer and permanently prohibited from being a director of, or having an interest in, a body corporate that is a dealer.
Second-hand Vehicle Dealers Act 1995 (SA) ss 9,11, 27(1), 29, 31(1); Fair Trading Act 1987 (SA) s 58(a); Goods and Securities Act 1986 (SA) s 19(1), referred to.
Sobey v Commercial and Private Agents Board (1979) 22 SASR 70, considered.

COMMISSIONER FOR CONSUMER AFFAIRS v BUTTIGIEG
[2011] SADC 48

These are the reasons for decision in relation to a complaint made by the Commissioner for Consumer Affairs (“the CCA”) against a second-hand vehicle dealer, Benjamin Ronald Buttigieg, whose licence was cancelled on 15 January 2009 under s 11(4) of the Second-hand Vehicle Dealers Act (SA) (“the Act”) following his failure to comply with the annual requirements of s 11(2) of the Act.
The CCA alleges that there is proper cause for disciplinary action and submits that the appropriate disciplinary action is permanent disqualification of the respondent from being licensed under the Act pursuant to s 31(1)(e).
The CCA further seeks that the respondent is permanently prohibited from being employed or otherwise engaged in the business of a dealer pursuant to s 31(1)(f) and from being a director or having an interest in a body corporate that is a dealer pursuant to s 31(1)(g).
Section 27 of the Act provides for various matters which constitute proper cause for disciplinary action against a second-hand vehicle dealer. Of particular relevance are ss 27(1)(c) and 27(1)(h):
27—Cause for disciplinary action
(1)     There is proper cause for disciplinary action against a dealer if—
…….
(c)     the dealer or another person has acted contrary to this Act or otherwise unlawfully, or improperly, negligently or unfairly, in the course of conducting, or being employed or otherwise engaged in, the business of the dealer; or
…….
(h)     events have occurred such that the dealer would not be entitled to be licensed as a dealer if he or she were to apply for a licence.
Entitlement to be licensed is derived from s 9 of the Act, relevantly sub‑secs 9(1)(b)(ii) and 9(1)(f) as set out below:
9—Entitlement to be licensed
(1)     A natural person is entitled to be licensed as a dealer if the person—
……..
(b)     has not—
(ii)during the period of 10 years preceding the application for a licence, been convicted of a summary offence of dishonesty; and
……..
(f)    is a fit and proper person to be the holder of a licence.
Overview
The respondent was previously a holder of a second-hand vehicle dealer’s licence (MVD 183058) pursuant to the provisions of the Act. The respondent was carrying on business as a second-hand vehicle dealer at 467 Torrens Road, Woodville, South Australia, and later at 1380 South Road, Clovelly Park, South Australia.
This complaint relates to the respondent acting unlawfully or improperly in a number of incidents that occurred in the course of the respondent conducting the business of a second-hand vehicle dealer. It is submitted that such unlawful or improper behaviour is grounds for disciplinary action under s 27(1)(c) of the Act.
Paragraph one of the complaint relates to the respondent having pleaded guilty on 5 May 2008 to two counts of making false representations in the course of trade or commerce with respect to the history of goods contrary to s 58(a) of the Fair Trading Act 1987 (SA).
The respondent was also found guilty on 27 August 2008 of three counts of interfering with odometers on second-hand vehicles by altering the reading on the odometer contrary to s 34(1) of the Act, and two counts of making false representations in the course of trade or commerce with respect to the history of goods contrary to s 58(a) of the Fair Trading Act 1987 (SA).
Paragraph two of the complaint relates to the respondent pleading guilty on 8 May 2008 to two breaches of s 19(1) of the Goods and Securities Act 1986 (SA).
Paragraphs three, four, five and six of the complaint all relate to the respondent causing the Second-hand Vehicles Compensation Fund to be depleted.
Paragraph three relates to an order that was made under Schedule 3 of the Act by Mr Kleinig SM on 14 December 2007 authorising a compensatory payment in the sum of $10,683.35 to be made to Ms Pearl Brooks and Mr David Brooks from the Second-hand Vehicles Compensation Fund. The respondent to that claim is the respondent in the current proceedings.
Paragraph four relates to an order that was made under Schedule 3 of the Act by Mr Millard SM on 23 June 2008 authorising a compensatory payment in the sum of $2,072.20 to Ms Kerry Richards from the Second-hand Vehicles Compensation Fund. The respondent to that claim is the respondent in the current proceedings.
Paragraph five relates to an order that was made under Schedule 3 of the Act by Dr Cannon DCM on 16 April 2009, authorising a compensatory payment in the sum of $5,575.65 to Ms Elise Nisbett from the Second-hand Vehicles Compensation Fund. The respondent to that claim is the respondent in the current proceedings.
Paragraph six relates to an order that was made under Schedule 3 of the Act by Dr Cannon DCM on 2 July 2009, authorising a compensatory payment in the sum of $3,825.00 to Mr Stanis Kale from the Second-hand Vehicles Compensation Fund. The respondent to that claim is the respondent in the current proceedings.
It is further alleged by the CCA that these events entail that the respondent would not be granted a licence were he to apply for one because he is not a fit and proper person to hold a second-hand vehicle dealer’s licence under s 27(h) of the Act.
Counsel for the CCA also submitted that the respondent has demonstrated that he did not understand the requirements of his licence in selling a car that was security for a registered loan.
The respondent has failed to attend Court in relation to this matter and has not admitted or denied the allegations made by the CCA. Service of the primary complaint upon Mr Buttigieg took place on 18 January 2010. On 16 July 2010, notice of the hearing on 6 August 2010 and the book of relevant documents were served at a place where the respondent was known to reside.
I note that in other Court proceedings the respondent has expressed that he no longer wishes to continue working as a second-hand vehicle dealer.
I was satisfied that the respondent had notice of the hearing and determined to proceed with the hearing under s 29 of the Act in his absence.
Complainant’s submissions
Counsel for the CCA submitted that interference with an odometer in order to make a profit is a separate process from that of actually selling the vehicle to a customer with the incorrect odometer reading. It was submitted that the odometer reductions would drastically change the potential consumer’s view of the vehicle in terms of its safety, quality, durability and value. Further, it was submitted that repairs or services needing to be undertaken when vehicles reached a certain age or mileage might not be conducted at the appropriate time, which could have implications for the safety of the vehicles.
The respondent was a licensed dealer and, as such, the public were likely to have believed that this provided them with some protection. It was the submission of counsel for the CCA that the respondent abused that trust.
It was submitted that, whilst GE Money did not suffer any financial loss as a result of the sale of the two vehicles over which it held a security interest, it was found that the loan had been unsecured for several months and therefore GE Money’s money was at risk. It was also found, however, that the respondent had sold the two vehicles mistakenly believing that he did so with the approval of GE Money.
Counsel for the CCA further submitted that the breaches of the Act were flagrant and numerous and occurred over a period of time. Additionally, there has been no evidence of contrition in this matter.
The respondent has a number of prior convictions other than those referred to above. These are largely driving offences, mainly driving under disqualification and driving unregistered. These prior convictions are relevant to this current complaint through s 27(1)(h) of the Act, which provides that there is proper cause for disciplinary action against a dealer if events have occurred such that the dealer would not be entitled to be licensed as a dealer if he or she were to apply for a licence. It is submitted by counsel for the CCA that, under s 9(1)(f) of the Act, the respondent is not entitled to hold a licence as he is not a fit and proper person to be the holder of the licence.
Conclusion and orders
I have had regard to the evidence provided by the CCA. I have also considered the authorities on the standard of fitness required for an applicant of a licence, particularly Sobey v Commercial and Private Agents Board[1].
[1] (1979) 22 SASR 70
Accordingly, I am satisfied, on the balance of probabilities, that the acts of which the respondent has been found guilty are such that he would not be entitled to be licensed as a dealer were he to apply for a licence by reason of the provisions of s 9(1)(f) of the Act.
Further, pursuant to s 9(1)(b)(ii), he was not entitled to be licensed because of the summary convictions of dishonesty.
I am satisfied, on the balance of probabilities, that there is proper cause for disciplinary action to be taken against the respondent pursuant to s 27(1)(c) and 27(1)(h) of the Act.
Dishonest representation of second-hand vehicles is not to be tolerated. In the misrepresentations alleged here, serious safety issues could have arisen as cars were presented to potential and actual customers as having a much lower mileage than they actually had. Further, there is potentially significant profit to be made at the expense of consumers by misrepresenting the mileage of vehicles. The penalty I impose must protect the public and have a deterrent effect on others who deal in second-hand vehicles.
I hereby order that the respondent is permanently disqualified from holding or obtaining a licence under the Act pursuant to s 31(1)(e).
I further order that the respondent is permanently prohibited from being employed or otherwise engaged in the business of a dealer pursuant to s 31(1)(f), and I permanently prohibit the respondent from being a director of, or having an interest in, a body corporate that is a dealer pursuant to section 31(1)(g).